The much-touted iPad was launched amid great fanfare in the US on Saturday, prompting analysts to question whether Apple Inc’s tablet device will put a brake on growth in e-reader sales.
“Although e-readers offer features not found on iPad or tablet devices, we expect their single functionality and lack of quality color displays will result in significant pricing pressure from the iPad, which retails as low as US$499,” Dale Gai (蓋欣山), an equity research analyst at Yuanta Securities Co (元大證券), said in a report last Tuesday.
To drive demand, 9-inch monochrome e-readers should be priced below US$199 in the US and US$99 in China. In these scenarios, margin pressure will hit the supply chain, Gai said.
While global shipments of 10 million e-readers this year — up from 4 million last year — is achievable, industry downside risks are expected over the next two years unless significant technological breakthroughs lower average selling prices and offer better color solutions, the report said.
Topology Research Institute (拓璞產業研究所) said last week that if the iPad craze maintains its momentum, total sales could reach 5 million units in the first three months.
Taking into account other tablet devices such as tablet PCs, combined shipments are expected to hit 12 million this year, beating e-readers in terms of sales, the Taipei-based research firm said.
Yuanta said electrophoretic displays (EPD) account for between 25 percent and 30 percent of e-readers’ total material costs, with prices controlled by E-Ink Corp, a subsidiary of e-paper display maker Prime View International Co (元太科技).
Projective capacitive-type touch panels also account for 25 percent of ipad's total material costs, but a 25 percent to 30 percent year-on-year price drop will result a deeper cost-curve than E-Ink’s EPD from next year onwards, it said.
“E-readers face serious questions — either offer a deep price cut at the expense of margin, or stay in the niche sector with less growth potential beyond next year,” Gai wrote.
Although the market will see enriched e-reader devices, with such technologies as flexible substrates and touch panels, the mainstream 9-inch monochrome e-readers could offer less novelty this year, while mass production of color e-readers is still in its infancy, he said.
Therefore, E-Ink’s dominant share is expected to face intensifying competition from the second half of next year, Gai said.
While E-Ink should retain between 80 percent and 90 percent of the e-reader market this year, it faces rising rivalry from low-cost suppliers like Sipix Technology Inc (達意科技) and emerging technologies like Mirasol and AMOLED, which will replace TFT-LCD in handsets and pose a long-term threat to pure e-reader devices, he said.
However, Prime View chairman Scott Liu (劉思誠) said in February he believed the iPad would not jeopardize e-reader sales, as the iPad’s TFT display is less suitable for text reading and shortcomings, such as shorter battery life and extra costs for 3G wireless Internet connection, would mute enthusiasm.
Also See: IPad’s popularity signals tablet revival
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
FACTORY SHIFT: While Taiwan produces most of the world’s AI servers, firms are under pressure to move manufacturing amid geopolitical tensions Lenovo Group Ltd (聯想) started building artificial intelligence (AI) servers in India’s south, the latest boon for the rapidly growing country’s push to become a high-tech powerhouse. The company yesterday said it has started making the large, powerful computers in Pondicherry, southeastern India, moving beyond products such as laptops and smartphones. The Chinese company would also build out its facilities in the Bangalore region, including a research lab with a focus on AI. Lenovo’s plans mark another win for Indian Prime Minister Narendra Modi, who tries to attract more technology investment into the country. While India’s tense relationship with China has suffered setbacks